13 US duties on steel products: repeal
of Community counter-measures
| (25136)
15298/03
COM(03)788
| Draft Council Regulation repealing Regulation (EC) No. 1031/2002 establishing additional customs duties on imports of certain products originating in the United States of America.
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| Legal base | Article 133 EC; QMV
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| Document originated | 8 December 2003
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| Deposited in Parliament | 11 December 2003
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| Department | Trade and Industry
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| Basis of consideration | EM of 19 December 2003
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| Previous Committee Report | None, but see footnotes
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| Agreed in Council | 12 December 2003
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
13.1 The United States imposed, with effect from 20 March 2002,
a so-called "safeguard measure" on a wide range of steel
products, in the form of tariff quotas and additional duties.
According to the Commission, the Community was among those exporting
interests most hit by these measures, which it said were causing
considerable injury to the producers concerned. It also considered
that the steps taken by the US substantially disturbed the balance
of concessions and obligations resulting from the World Trade
Organisation (WTO) Agreement, and would significantly limit Community
exports to the US of the products concerned.
13.2 The Commission consequently initiated the WTO
dispute settlement procedures by requesting consultations, but
said that, as the Community and the US had failed to agree any
adequate means of compensation, the Community had the right to
adopt re-balancing measures against the US, up to the level of
the adverse trade effect caused by the American safeguard measures.
It therefore proposed[45]
on 19 April 2002 the measures which it considered the Community
should take, comprising additional duties on imports of a selected
range of manufactured products of US origin on which it was not
substantially dependent, but which were likely to have an impact
on the US equivalent to that of the US measures on the Community.
Some of the Communitys measures (covering principally, but not
exclusively, US steel exports) would apply within 90 days, whilst
the others would apply only after 20 March 2005, or after the
WTO Dispute Settlement Body had ruled against the US measures,
and to the extent that the latter still remained in place at that
stage.
13.3 In our Report of 22 May 2002, we commented that,
whilst an all-out trade war would be a matter of concern, it seemed
entirely reasonable for the Community to take the sort of steps
contained in this proposal, if only as a means of exerting some
kind of pressure on the US authorities. In view of this, and
the strict timetable for such action laid down in the relevant
WTO procedures, we cleared the document, but we said that would
be glad if the Government could keep us informed of any subsequent
developments.
13.4 As we subsequently reported on 10 July 2002,
the original Commission proposal was in fact amended in a number
of respects,[46] and
was given legal effect by Council Regulation (EC) No. 1031/2002.[47]
The current document
13.5 The Regulation includes a provision enabling
the Council to repeal it in the event of the United States lifting
its original safeguard measures, and the Minister of State for
Trade and Investment at the Department of Trade and Industry (Mr
Mike O'Brien) wrote to us on 5 December 2003 to say that, following
the decision of the US Government to comply with a WTO ruling
against its steel safeguard tariffs, the Commission was expected
to propose a Regulation repealing Regulation 1031/2002. He also
explained that it was important that the new Regulation should
come into force before 15 December, otherwise the counter-measures
in the earlier Regulation, due to be triggered by the WTO ruling,
would automatically come into effect.
13.6 This document simply sets out the draft of the
repealing Regulation, and, as the Minister has explained in his
Explanatory Memorandum of 19 December, it was adopted by the Council
on 12 December.
Conclusion
13.7 We are pleased to note that this trade dispute
has now been resolved, and we think it right to draw to the attention
of the House this measure repealing the counter-measures which
the Community had put in place. We clear the document.
45 (23048) 8219/02: HC 152-xxxi (200102), paragraph
7 (22 May 2002). Back
46
(23541) - and (23558) 8220/02; see HC 152-xxxvi (2001-02), paragraph
13 (25 July 2002). Back
47
OJ No. L.157, 15.6.2002, p.8. Back
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